Staying the Course

A bias for action can create blind spots

The headlines pile up faster than anyone can process them. Tariffs are back. Supply chains are broken. And China is in the news for all the usual reasons, this time with massive duties on electric vehicles, threats of retaliation, and a growing sense that some kind of larger trade realignment is underway. Investors start reading into every move, CEOs start fielding new questions from their boards, and within a few days, it feels like every conversation about strategy has been quietly replaced by a conversation about risk.

The discomfort of doing nothing

It is not surprising that people behave this way. In fact, it’s entirely rational. There is something about uncertainty that creates its own gravitational pull. Nobody wants to be caught flat-footed if the world really is about to change in some fundamental way. And yet, it has been hard not to notice how often this instinct to act quickly becomes a kind of reflex. One that is not necessarily driven by real analysis or insight, but by the simple discomfort of doing nothing while conditions around you feel unstable.

That, to me, is what makes this moment so interesting. Because while it is true that the world is changing, and that certain risks are very real, it is equally true that most of the consequences now being feared were entirely foreseeable. Tariffs between the U.S. and China are not new. Supply chain diversification has been a talking point for years. Inflation, interest rates, labor shortages — none of these are sudden developments. And yet it seems that every time conditions tighten or headlines flare up, many individuals and organizations can seem to react as if they are encountering these dynamics for the very first time.

This is where the distinction between reaction and resilience starts to matter most. Reaction happens in the moment while resilience happens years earlier. It is the product of hundreds of small, unremarkable decisions that rarely feel urgent or glamorous at the time, but which quietly compound until they become a genuine advantage when things get difficult.

What jeans, consulting, and tech have in common

Consider Levi’s, which now sources less than one percent of its product from China. That position was not built overnight. It was not the result of scrambling to adjust to this week’s headlines. It was the outcome of a deliberate strategy executed over many years, rooted in the basic recognition that a more diversified supply chain would leave the company better positioned to weather whatever came next.

Or think about certain professional services firms coming out of COVID, whose decision to focus on durable end markets like healthcare, infrastructure, and education may have looked conservative when technology clients were driving explosive growth elsewhere, but which now looks like a remarkably steady foundation in a more uncertain environment. These are not stories of agility or fast pivots, they are stories of patience and preparation.

To be clear, none of this is an argument against vigilance. If anything, volatile markets demand a higher standard of clarity and diligence. This is the time to understand your exposures deeply, to revisit your assumptions about customers and suppliers, and to think carefully about the second- and third-order effects of the changes taking place around you.

Take a US-based IT services company. Let’s say it serves clients across healthcare, financial services, and sports and entertainment. It primarily delivers on-shore services like helpdesk support, infrastructure monitoring, and cybersecurity, but it also provides some technology equipment as part of its solutions. If tariffs or supply chain disruptions start raising the price of that equipment, the first-order effect is obvious enough. Hardware margins get compressed. Lead times get longer. Maybe the company has to eat those costs, maybe they pass them on to clients, but either way, it starts to hurt.

The second-order effects show up a little later, and they’re more behavioral. Financial services clients, facing their own cost pressures, start delaying IT upgrades. Sports and entertainment clients, whose revenue is more discretionary and more directly tied to consumer spending, become even more price sensitive, or start shopping for lower-cost providers. Healthcare clients, which would likely be relatively stable by comparison, might actually lean harder into multi-year managed services contracts to lock in predictability.

The nth-order effects

The nth-order effects encapsulate all the weird stuff and the messy, compounding consequences where things often get interesting, and where real resilience (or lack of it) tends to show up.

Deferred IT upgrades mean aging infrastructure. Aging infrastructure means more service incidents. More service incidents mean higher labor demands on the company’s helpdesk and field teams, potentially without any corresponding increase in revenue. At the same time, longer hardware lead times make even routine replacements harder to execute, which puts even more pressure on internal teams to triage and patch and keep things limping along.

Eventually, what started as a hardware pricing problem turns into an operational one. A company that thought it was exposed to tariffs only through its small hardware business wakes up six months later struggling with labor capacity, customer satisfaction, and SLA compliance. Far from being consequences of unfettered growth, the company is suffering because its customers stopped investing in their own infrastructure.

Taking it even further, consider something like a weakening U.S. dollar. The obvious impact is easy enough to spot. Imported goods get more expensive. Global companies see foreign earnings translate more favorably back into dollars. But past that, the ripple effects start to get weird. If the dollar stays weak long enough, does that accelerate reshoring efforts in certain industries, diminishing the unique value of your on-shore service delivery model? Does it pull foreign competition out of U.S. markets where their cost advantage shrinks, weakening competition among your suppliers and increasing their bargaining power? Does it eventually lead to wage pressure in export-heavy parts of the economy that weren’t feeling it before?

Or think about weakening consumer confidence. At first, it shows up in discretionary spending for restaurants, apparel, entertainment, etc. But then it creeps into business spending too, because when consumers get nervous, businesses get nervous. Marketing budgets tighten, sales cycles lengthen, capital projects get delayed. Eventually you end up with entirely new constraints that have nothing to do with demand evaporating overnight but rather that enough people hesitated long enough to create real softness in parts of the economy that didn’t look exposed at the start.

This is why it’s so difficult to model resilience off a single variable. The nth-order effects of a macro environment like this rarely follow a straight line. They accumulate in behaviors, in incentives, in all the small human decisions that people and organizations make when they’re uncertain about what comes next.

And in some ways, that’s the real case for resilience in the first place. It’s not about predicting each domino that might fall. It’s about building in enough flexibility in operations, strategy, and capital structure to avoid getting trapped when they start falling in combinations you didn’t expect. What is striking is how often this kind of preparation leads not to wholesale strategic shifts, but to an increased confidence in staying the course.

Abandoning your priors

The willingness to stay the course even when new information shows up is often at odds with how people are wired to behave. Especially in uncertain environments, there’s a natural tendency to over-weight whatever new data is in front of us, even if it’s noisy or incomplete.

It’s the same mistake people make standing in line at the grocery store. You pick a lane, it feels like it’s moving too slowly, and so you switch. But most of the time, switching lines doesn’t actually save you time. It just feels like doing something. You abandoned a long-term average based on a very short-term signal.

This is, at its core, exactly the kind of mistake Bayesian thinking is designed to help avoid. In this theory, every new piece of information should adjust your view of the world only slightly and in proportion to how reliable and surprising that new information actually is. But in practice, people abandon their priors constantly. They see one slow-moving customer and decide the whole line is doomed. They see one bad headline and decide their strategy is broken.

The reality is that resilience is built precisely to prevent that kind of error. It’s the structure that lets you sit still long enough to see whether the signal you’re reacting to is real or just noise.

Creating optionality for strength

If the business you built was designed with resilience in mind — meaning, if it serves essential customer needs, operates with flexibility, and maintains a thoughtful balance sheet — then it is very possible that the right move in times like this is not to act faster or more dramatically, but to continue executing patiently while others overcorrect.

That patience, of course, should not be mistaken for passivity. If anything, resilience creates optionality. It raises the bar for new decisions, because new investments must now clear a higher threshold for returns given the increased risk in the environment. It also creates the freedom to act when genuine opportunities appear and not because you are desperate to do something, but rather because you are in a position to take advantage of mispricing, dislocation, or fear-based retrenchment from others who were less prepared.

There is a particular kind of strength in being able to hold steady while the world gets noisy. It does not look dramatic and it rarely feels exciting. But over time, it is often the single most powerful position to be in.

Staying power is not built in response to uncertainty: it’s built long before uncertainty arrives. And it is most valuable precisely when everyone else is looking for a way out.